MUMBAI: Private sector lender IDFC First Bank said a forensic review by KPMG found that the ₹646 crore fraud uncovered at its Chandigarh branch earlier this year was an isolated incident involving collusion between branch employees, customer representatives and third parties.
In a stock exchange filing on Friday, the bank said the findings reaffirmed that the fraud was limited to the Chandigarh branch.
Nicknamed ‘Project Ultra’, the KPMG review found that the modus operandi involved collusion between the branch employees, certain employees of the customers, and certain individuals external to the bank.
To process the unauthorized transactions, potentially modified/edited authorization letters, cheques (including misuse of few cheques) and approval emails were attached with transaction vouchers by the then branch staff, the report found. In certain instances, signature inconsistencies were also observed.
“Subsequently, in certain instances non-existent Fixed Deposit Advices (FDA), edited interest certificates and modified bank account statements were shared with the customers,” it said.
In February, the Warburg Pincus-backed lender said a discrepancy came to light when a Haryana government department sought to close its account and transfer the funds to another bank. The account balance was found to differ from what the account owner believed it should be.
Mint reported in February that the bank was investigating whether the documents at the centre of the alleged fraud at its Chandigarh branch were genuine or forged.
The bank said the net principal amount of around ₹646 crore quantified in the forensic report was in line with its previous disclosures.
“The bank paid the aforesaid amount and applicable interest to the concerned departments and has recognised the same in the books of accounts in Q4FY26. The bank is a victim of this financial fraud and is working with investigative authorities,” it said.
According to the lender, the records in the Core Banking System (CBS) were accurate and customers were provided monthly account statements reflecting their balances and transactions, and were notified, where applicable as per process, through SMS alerts regarding transactions in their accounts.
